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Bank deposit rate clustering: theory and empirical evidence

Charles Kahn, George Pennacchi and Ben Sopranzetti

No 9604, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: An examination of banks' optimal deposit-rate-setting behavior when some customers have limited recall, showing that when banks exploit this phenomenon, deposit rates will tend to be set at round fractions and will be relatively \"sticky\" at these levels.

Keywords: Bank deposits; Interest; Prices (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (4)

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Journal Article: Bank Deposit Rate Clustering: Theory and Empirical Evidence (1999) Downloads
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